We take a look at sector analysis and see how our different groups of customers are investing in different stocks.
Millennials take stock of tech ISAs
Sector analysis is always interesting as it gives our investors a real insight into what’s popular on a larger scale among The Share Centre’s customers. What’s clear so far in 2018 is that younger and older age groups are investing in different sectors, likely reflecting their experience, objectives and outlook for the future.
|Top purchased sectors||Top purchased sectors by Millennials (aged 18-36)||Top purchased sectors by those aged 60+|
|1||Mining||Mining||Oil & Gas Producers|
|2||Oil & Gas Producers||Oil & Gas Producers||Mining|
|3||Pharmaceuticals & Biotechnology||Software & Computer Services||Pharmaceuticals & Biotechnology|
|4||Support Services||Pharmaceuticals & Biotechnology||Gas, Water & Multi-utilities|
|5||General Retailers||General Retailers||Support Services|
Mining and Oil and Gas appeal to both Millennials and the over 60s
Across the board, Mining as well as Oil and Gas producers feature as the two most invested in sectors within ISAs. This is a constant most years because, within each sector, ISA investors can get a wide range of exposure, from well-established, income generative options, all the way through to the higher risk growth stocks. Experience tells us that when investors are ready to opt for a punt, they tend to go for a smaller company within these sectors, essentially because there is a constant interest and relevance to our day to day lives.
But investing in technology is a priority for 18-36 year olds
The split between investments comes when analysing the third to fifth most purchased sectors across the age groups. It’s clear from the data that Millennials are putting a much bigger emphasis on investing in technology related companies, and the presence of the Software and Computer Services sector reflects this ethos.
Undeniably, 18-36 year olds have grown up understanding and utilising products and services provided by these companies so it’s not surprising there’s an invested interest. Moreover, with increasing talk regarding robots playing an ever larger role in our day to day lives, artificial intelligence systems becoming entrenched (just Ask Siri) and new materials continually being introduced to better develop and adapt the proposition, it’s foreseeable that this awareness will be enhanced amongst the cohort.
General retailers are also attracting the millennial investor but tech still wins
The other interesting differentiation between the two age groups is that 18-36 year olds are also showing a preference for General Retailers. That being said, it is the online companies that are intriguing them, with clothes retailer Boohoo, food delivery group Just Eat and British online supermarket Ocado taking the biggest concentration. I’d say ‘invest in what you know’ is the clear theme coming from Millennials.
Pharmaceuticals & Biotechnology companies appeal to both age groups
Without a doubt, globally, we are entering a new era where innovation and treatments are developing at a faster rate than ever before. We are all becoming more aware and health conscious, as well as having populations that are living significantly longer. With that in mind, the presence of Pharmaceuticals & Biotechnology companies for both age groups is self-explanatory, as perhaps is the increasing priority given by those aged 60+ to such companies.
The older generation is also showing a preference for generating income which is expected given that most are of the age where they are considering, approaching or enjoying retirement. There are most certainly companies within all of the sectors that those aged 60 or above are investing in that are well-respected names, providing them with stability, reliability and a relatively steady stream of capital.
Savvy investors determine popularity of sectors
The two sectors that are different to Millennials come in the shape of Gas, Water and Multi-Utilities as well as Support Services and one could argue that companies within both of these sectors produce things that we all need in our day to day lives complementing the shorter term outlook the group of investors have. The presence of the latter may be a little surprising given that there have been tough times for those sitting within it, Carillion and Capita are good examples of this. Nonetheless, both of these sectors offer a wide range of investments and the experience and savvy nature of the investor may also explain their presence.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.